TaxTMI 
TaxTMI 
2015 (12) TMI 1524
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....gineering & Maintenance and has also started a college in Barasat for imparting training in the aforesaid areas. The Assessee is also a renowned astrologer. 2.1. As far as the Assessee is concerned assessments were framed for 6 AYs from 2000-01 to 2006-07 as required under the provisions of Sec.153A of the Act. In the course of search various documents and papers were found. The documents and papers so found showed that Assessee had made investments in purchase of properties besides monies lying in various bank accounts. The investments and monies so found for the various AYs were to the tune of Rs. 12,09,896/-. The above computation of investments and monies were given by the Assessee himself in the course of assessment proceedings u/s.153A of the Act. The sum of Rs. 12,09,896/- was offered to tax in various AYs by the Assessee as follows: AY 2000-01 Rs.26,000 AY 2001-02 Nil AY 2002-03 Rs.56,741 AY 2003-04 Rs.10,44,874 AY 2004-05 Rs.45,688 AY 2005-06 Rs.564 AY 2006-07 Rs.36,051 As far as AY 2003-04 is concerned, the Assessee gave the break-up of source of funds of Rs. 10,44,874 which were not disclosed to the department in making the aforesaid investments and depos....
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....action in the order of assessment that the Assessee is liable to be proceeded against u/s.271(1)( c) of the Act except recording as follows in the order of assessment viz., "Penalty proceeding u/s.271(1)( c) initiated." According to him the above manner of initiation of penalty proceedings in the order of assessment is not in accordance with law. In this regard he made reference to the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. MWP Ltd. (2014) 41 taxmann.com 496 (Karn.). In the aforesaid decision it was held that mere mention of "Penalty Proceedings under section 271(1)( c) initiated separately" in assessment order, does not amount to a direction under Section 271(1)( (c) for levy of penalty. The learned counsel pointed out that the Hon'ble Karnataka High Court in the aforesaid decision has considered the effect of Sec.271(1B) of the Act, in the light of the decision of the Hon'ble Delhi High Court in the case of Ms. Madhushree Gupta Vs. Union of India 317 ITR 107(Del) wherein it was held "In the result, conclusions are as follows : (i) sec. 271(1B) is not violative of Art. 14 of the Constitution; (ii) the position of law both pre and post amendment is si....
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....of CIT Vs. Manjunatha Cotton & Ginning Factory (2013) 218 Taxman 423 (Kar.) wherein it was held that if the show cause notice u/s.274 of the Act does not specify as to the exact charge viz., whether the charge is that the Assessee has "furnished inaccurate particulars of income" or "concealed particulars of income" by striking out the irrelevant portion of printed show cause notice, than the imposition of penalty on the basis of such invalid show cause notice cannot be sustained. 4. The learned DR relied on the order of the CIT(A). He placed reliance on the decision of the Hon'ble Supreme Court in the case of MAK Data (P) Ltd. Vs. CIT 358 ITR 593 (SC) wherein it was held that satisfaction is not required to be recorded in any particular manner or reduce such manner of arriving at satisfaction in writing. 5. The learned counsel for the Assessee placed reliance on the decision of the Hon'ble AP High Court in the case of CIT Vs. Lotus Constructions (2015) 55 taxmann.com 182 (AP) wherein the Hon'ble AP High Court explained the decision of the Hon'ble Supreme Court in the case of MAK Data (supra) and held that in the absence of initiation of penalty proceedings in the order of assessm....
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....ceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer 8 deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The AO, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable....
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....shing inaccurate particulars of income" or "concealing particulars of such income". 9.1. The Hon'ble Karnataka High Court in the case of CIT & Anr. v. Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Karn), has held that notice u/s. 274 of the Act should specifically state as to whether penalty is being proposed to be imposed for concealment of particulars of income or for furnishing inaccurate particulars of income. The Hon'ble High court has further laid down that certain printed form where all the grounds given in section 271 are given would not satisfy the requirement of law. The Court has also held that initiating penalty proceedings on one limb and find the assessee guilty in another limb is bad in law. It was submitted that in the present case, the aforesaid decision will squarely apply and all the orders imposing penalty have to be held as bad in law and liable to be quashed. 9.2. The Hon'ble Karnataka High Court in the case of CIT & Anr. v. Manjunatha Cotton and Ginning Factory (supra) has laid down the following principles to be followed in the matter of imposing penalty u/s.271(1)(c) of the Act. "NOTICE UNDER SECTION 274 59. As the provision stands, the penalty ....
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....e grounds mentioned in Section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the....
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....discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition of penalty even if the tax liability is admitted is not automatic. k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the assessing officer in the asses....